
“Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do.”
Warren Buffett
These are uncertain times for investors. There’s volatility in the stock market, uncertainty in the housing market, and massive unpredictability in the political arena. Let’s take a look at what’s happening and—most importantly—effective strategies for volatility that will keep you building wealth in any market!
The stock market: 2020 was a volatile year for the stock market. Lockdowns saw the market plummet, then making some recoveries later in the year. Now in 2021, we’ve seen crazy things happen with GameStop, AMC, and other businesses exploding artificially overnight.
In the last week the Nasdaq has plummeted, despite being one of the strongest equity indexes last year. This week, it briefly undercut 13,000 points, which represents a nearly 2.7% backslide. The S&P 500 and Dow aren’t faring much better, the former dropping 1% and the latter erasing any previous recovery from the last few weeks.
Despite all the business closures and volatility of last year, the vaccine made investors hopeful that the markets would stabilize. While investors are optimistic as the vaccine continues to rollout, we could be seeing many more months of volatility on the horizon.
The housing market: After historically low mortgage rates in 2020, and a surge of homebuyers moving to the suburbs, rates are on the rise again. When this happens, the housing market typically slows. This is a great time for sellers, as many people are overpaying for homes after getting locked in bidding wars. There’s a big push to relocate out of over-populated areas. For buyers, however, this means there’s a lot of competition.
The “X” factors: Why are we seeing more volatility in the markets? Depending on who you ask, the cause could be:
- Lingering effects of COVID
- Brexit woes
- Tensions over trade
- The era of a new President
- Fluctuating oil prices
- Rising interest rates
- Recent bank stock selloffs
- The reactions of both investors and traders to the above events
Investors are understandably wary. According to Allianz Life’s 2018 Market Perceptions study, 37 percent of investors are anxious about stock market volatility, most concerned they could not rebuild their retirement savings if large losses were sustained. More than four out of ten fear a major stock crash (42 percent) or recession (44 percent).
The survey was conducted in June 2018—before the dramatic increase in stock market volatility. Unfortunately, the volatility seems to be far from over.
Where will the markets and economy go from here?
That’s the million-dollar question… one that no one can answer with certainty.
An internet search for “economic predictions” will bring you forecasts from notable analysts and fund managers predicting:
- A continued recession… or perhaps, growth and low unemployment.
- A real estate crash… or perhaps, just a slow-down.
- Gold and silver could skyrocket… or maybe, precious metals will lose value in further corrections.
- The stock market will crash with losses exceeding 50%… unless it bounces back and keeps climbing.

The guessing game has become absurd! Covering his bases, Hedge fund pioneer Paul Tudor Jones—who predicted the ’87 “Black Monday” crash—forecast a 15% move either way for stocks in a recent CNBC interview.
7 Ways to Build Wealth in Any Circumstance
1. Build your financial foundation before investing.

Your savings represents your financial foundation. If you don’t yet have liquidity for emergencies and opportunities, your dollars should not be tied up in investments such as 401(k)s, IRAs, or other retirement plans. Build your savings first. That will give you the liquidity to weather financial storms and take advantage of lucrative opportunities that come your way.
Saving before investing also protects the investments you’ll be making. In the aftermath of the financial crisis of 2008, Americans pulled hundreds of billions of dollars prematurely from 401(k)s and other retirement accounts, paying penalties and taxes as well as taking huge market losses.
Begin with cash and a savings account for “everyday emergencies.” For long-term savings, consider dividend-paying high cash value life insurance policies for increased privacy, higher long-term returns, and tax-deferred growth within the policy. To understand further how a “boring” savings vehicle can accelerate wealth-building, read “The Power of Liquidity: Capitalizing with Cash.”
Where do BANKS save for a rainy day? You might be surprised!
2. Take control of your income.

The wealthy rarely have only one source of income, and they often have a high level of control over their income. Business owners and salespeople tend to make more than typical employees.
Already have work you love? Consider starting a part-time business on the side. (The potential tax savings alone can make it worthwhile!) You can start a network marketing or referral business with very little time or money, while developing business skills and writing off legitimate business expenses such as travel and entertainment. Even if you are a full-time student or stay-at-home parent, there are ways to earn money on the side, from being a weekend Uber driver to freelancing, consulting, or tutoring.
Real estate investing provides an income stream for many people, and it can be as simple as renting out your home instead of selling it when you purchase your next home. Or perhaps you have a spare room you can rent through AirBnB.com. Take control of your income and bullet-proof your wallet!
3. Always live beneath your means.

It’s personal finance 101, but it bears repeating: You must control your expenses. Americans have a low savings rate compared to people in other countries. This produces multiple problems, such as a lack of adequate emergency funds, which can lead to debt, bankruptcies, and poor choices.
People tend to equate wealth with income. However, just like football, it’s hard to win at wealth if you don’t play defense as well as offense! Controlling your expenses means:
- Knowing where your money is going.
- Having clarity on needs vs. wants.
- Maximizing tax incentives. (See “Slash Your Taxes” for tips.)
- Consistently spending less than you earn.
If you are living paycheck to paycheck, you’re more likely to make career choices based on immediate needs rather than long-term fulfillment. However, if you live beneath your means, you’ll have more options. You might be able to hold out for a better position or take extra time off to be a parent. Living beneath your means also makes you a better investor. You’ll feel less compelled to chase unrealistically high rates of return if you save a higher percentage of your income.
4. Protect your human life value.

The average American earns millions of dollars over a lifetime. Chances are, YOU are your most important financial asset. If a partner, spouse or children would be affected if you were no longer around or able to work, investigate whole life, and/or convertible term insurance and potentially, disability insurance as well to determine how to best protect your income. Your most important assets—financial and familial—are worth protecting.
Need help? Listen to this “Life Insurance 101” episode of The Prosperity Podcast, or contact us directly with questions or for a policy illustration.
5. Diversify outside of the stock market

We all understand the concept of not putting all your eggs in one basket. Yet too often, investors (and their brokers) interpret this to mean they should simply diversify their stocks. Being truly diversified means investing in different asset classes, not simply different types of stocks or mutual funds. If you are invested even in broad indices such as the S&P 500, you’re setting yourself up for pain.
“No BS Money Guy” Todd Strobel points out the reason why those invested heavily in the stock market feel a need to diversify… They don’t have confidence that their main strategy is one that will perform reliably for them.
Therefore, investors put their money in various financial vehicles in which they have more or less confidence, hoping that if one fails, another will succeed.
Asset Allocation: People focus on stocks (equities), bonds or annuities (fixed income) with perhaps bank accounts or CDs (cash and cash equivalents.) We prefer alternatives for growth, income, and cash. (These are detailed in our ebook you can download for free, Financial Planning Has Failed.)
Don’t neglect the asset classes that have helped people build substantial, sustainable wealth long before the financial planning industry even existed:
- Investment real estate—especially cash-flowing real estate, residential or commercial—can be excellent for increasing cash flow as well as decreasing taxes and building net worth.
- Want steady cash flow without the responsibilities of being a landlord? Become a private lender and put your assets to work.
- Permanent life insurance policies—particularly dividend-paying, high cash value whole life insurance—is an asset that has stood the test of time. Although not classified as an investment, life insurance offers compelling benefits for investors looking for a place to grow, store and leverage cash.
6. Invest in non-correlated assets.

The unpredictable stock market violates the principle of maintaining control of your investments. Instead, put your dollars into non-correlated alternative investments that won’t roller coaster ride with stocks. Uncorrelated assets can produce excellent returns and are also valuable as a “hedge” for mutual funds you may already own.
One of our favorite alternative investments is the one that pays no attention to politics, economics, interest rates or financial markets whatsoever! Perhaps that’s why Berkshire Hathaway, Bill Gates, major brokerages and pension funds have put large sums of money into life settlements. (Learn the basics here).
Avoid saving or investing in anything where your principal is at stake or where “roller coaster ride” volatility is the norm. We agree with Rule #1: “Never lose money.” Keep your money in your control.
Just because the big banks and brokers don’t sell something is not a reason to disqualify it. Get more information and ask questions, and make informed decisions rather than simply relying on conventional advice that presents limited choices.
Last but not least…
7. Guard your mindset as well as your money.

It’s not just our portfolios that can suffer from political conflicts and economic upheaval. Stay positive, be grateful, and focus on the things—and especially the people—that matter most to you.
Stress can take a powerful toll on our mental, physical, and emotional health. We have a higher capacity to succeed in our careers and businesses when we don’t allow ourselves to become bogged down with negativity and drama.
For these reasons and more, THINKING from a prosperous mindset is the first of our 7 Principles of Prosperity™.
In this podcast, listen to Kim Butler give tips on “How to Create an Abundance Mindset.”
Bulletproof Your Wealth!

Partners for Prosperity helps people build “Wealth Without Wall Street.” Our solutions enable clients to be confident their money is working for them… regardless of which direction the stock market charts are heading. Contact us today for financial strategies for volatility—or any economy.
Want to learn more? Download our complimentary Prosperity Accelerator Pack. You’ll receive my ebook, Financial Planning Has Failed, which details the exact strategies we use with our clients.
Disclosure: Our content is meant for educational purposes only. While it’s our goal to help you learn about building a life of prosperity, we do not intend to provide financial advice. Please consult your financial, tax or legal advisor before making any investment or financial decisions.